LNG market in Asia: Record activity in July 2024

In July, the Asian liquefied natural gas (LNG) market recorded record activity, marked by increased transaction dynamics and price fluctuations.

Partagez:

July saw a significant increase in activity on the physical liquefied natural gas (LNG) market in Asia.
Data from S&P Global Commodity Insights reveals that the total number of offers, requests and transactions reached an annual high, with 282 transactions recorded.
Eight major players, including ADNOC Trading, BP, EnBW, ENN, PetroChina, Glencore, Shell and Vitol, completed twelve transactions representing around 780,000 metric tons of physical LNG cargoes, scheduled for delivery in August, September and October in the Japan-Korea-Taiwan-China region.

Price Fluctuations and Demand Dynamics

Spot LNG prices in Asia fell slightly in July, averaging $12.158/MMBtu versus $12.578/MMBtu in June.
This was due to moderate demand and an abundance of cargoes available on the spot market.
Japan saw a temporary increase in LNG purchases due to high electricity demand caused by a heat wave, but purchases remained limited as utilities had anticipated this situation and prepared their inventories in advance.

Impact of Climate and Geopolitical Conditions

The southern and south-eastern regions of Asia experienced reduced buying interest due to the effects of the monsoon and discouraging price levels for Chinese importers. The shutdown of the Freeport LNG facility on July 7, ahead of Hurricane Beryl, raised concerns.
Damage to the air coolers and the power outage kept feed gas deliveries close to zero for over a week, before repairs were completed in mid-July.

East-West Arbitrage and Derivatives Market Activity

In July, arbitrage opportunities were limited due to narrow spreads between spot LNG prices in Europe and Asia.
Platts valued East-West arbitrage at minus 19.7 cents/MMBtu on August 1.
This reduction is also illustrated by a decrease in the number of bids nominating US base ports in the physical MOC process, from 51.1% in June to 29.7% in July.
The derivatives market also recorded record activity in July, with 1,704 offers, requests and transactions reported, marking an increase of 5.97% on the previous month and more than tripling year-on-year.
A total of 150 transactions for monthly and month-end JKM derivatives were reported by 19 entities, including ADNOC Trading, BP, Dare, DGI, Engie, Glencore, Gunvor, Jera GM, Marubeni, Macquarie, Mercuria, PetroChina, RWE, Shell, Six One Commodities, Total Energies, Trafigura, Unipec and Vitol.
In summary, July 2024 proved to be a key month for the Asian LNG market, characterized by record activity and notable fluctuations in price and demand.
Climatic and geopolitical conditions also had a significant impact, influencing both supply and demand.
This dynamic underlines the growing importance of LNG in the Asian and global energy landscape.

The increase in oil drilling, deepwater exploration, and chemical advances are expected to raise the global drilling fluids market to $10.7bn by 2032, according to Meticulous Research.
Enbridge Gas Ohio is assessing its legal options following the Ohio regulator's decision to cut its revenues, citing potential threats to investment and future customer costs.
The small-scale liquefied natural gas market is forecast to grow at an annual rate of 7.5%, reaching an estimated total value of $31.78bn by 2030, driven particularly by maritime and heavy-duty road transport sectors.
The European Union extends gas storage regulations by two years, requiring member states to maintain a minimum fill rate of 90% to ensure energy security and economic stability amid market uncertainties.
Energy Transfer strengthens its partnership with Chevron by increasing their liquefied natural gas supply agreement by 50% from the upcoming Lake Charles LNG export terminal, strategically aiming for long-term supply security.
Woodside finalises the divestment of a 40% stake in the Louisiana LNG project to Stonepeak, injecting $5.7 billion to accelerate developments and optimise financial returns ahead of first gas delivery scheduled in 2026.
Keranic Industrial Gas seals a sixty-day exclusivity deal to buy Royal Helium’s key assets, raise CAD9.5mn ($7.0mn) and bring Alberta’s Steveville plant back online in under fifteen weeks.
The Irish-Portuguese company Fusion Fuel strengthens its footprint in the United Arab Emirates as subsidiary Al Shola Gas adds AED4.4 mn ($1.2 mn) in new engineering contracts, consolidating an already robust 2025 order book.
Cheniere Energy validates major investment to expand Corpus Christi terminal, adding two liquefaction units to increase its liquefied natural gas export capacity by 2029, responding to recent international agreements.
A study by the International Energy Agency reveals that global emissions from liquefied natural gas could be significantly reduced using current technologies.
Europe is injecting natural gas into underground storage facilities at a three-year high, even as reserves remain below historical averages, prompting maximized imports of liquefied natural gas (LNG).
South Korea abandons plans to lower electricity rates this summer, fearing disruptions in liquefied natural gas supply due to escalating geopolitical tensions in the Middle East, despite recent declines in fuel import costs.
Russia positions itself to supply liquefied natural gas to Mexico and considers expanded technological sharing in the energy sector, according to Russian Energy Minister Sergey Tsivilyov.
Israel has partially resumed its natural gas exports to Egypt and Jordan following a week-long halt due to the closure of two major offshore gas fields, Leviathan and Karish.
Nepal reveals a significant potential reserve of methane in the west of the country, following exploratory drilling conducted with technical support from China, opening new economic prospects.
Petronas formalizes a memorandum with JOGMEC to secure Japanese LNG deliveries, including a first cargo from LNG Canada scheduled for July at Toho Gas.
Belgrade is currently finalising a new gas contract with Russia, promising Europe's lowest tariff, according to Srbijagas General Director Dusan Bajatovic, despite Europe's aim to eliminate Russian imports by 2027.
TotalEnergies and QatarEnergy have won the Ahara exploration licence, marking a new stage in their partnership with SONATRACH on a vast area located between Berkine and Illizi.
After four years of interruption due to regional insecurity, TotalEnergies announces the upcoming resumption of its liquefied natural gas project in Mozambique, representing a $20bn investment.
The French group has acquired from PETRONAS stakes in several licences covering more than 100,000 km² off Malaysia and Indonesia, consolidating its Asian presence and its exposure to the liquefied natural gas market.